SECOND SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 65006/01 
by LÄNSFÖRSÄKRINGAR SKARABORG 
against Sweden

The European Court of Human Rights (Second Section), sitting on 27 September 2005 as a Chamber composed of:

Mr J.-P. Costa, President
 Mr R. Türmen
 Mr M. Ugrekhelidze
 Mrs A. Mularoni
 Mrs E. Fura-Sandström
 Ms D. Jočienė, 
 Mr D. Popović, judges
and Mrs S. Dollé, Section Registrar,

Having regard to the above application lodged on 13 December 2000,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,

Having deliberated, decides as follows:

THE FACTS

The applicant, Länsförsäkringar Skaraborg, is a Swedish insurance company. It was represented before the Court by Mr S. Larsson, a lawyer practising in Eksjö. The respondent Government were represented by Ms A. Linder, Ministry for Foreign Affairs.

A.  The circumstances of the case

The facts of the case, as submitted by the parties, may be summarised as follows.

Falköpings missionsförsamling, a religious congregation, had taken out a fire insurance policy with the applicant company for a piece of property it owned. On 1 April 1993 H.J. commenced work development training (ALU-utbildning) at the congregation. On 5 April he set fire to the house on the property which burnt down completely. H.J. was later convicted of arson.

The applicant company paid an indemnity to the congregation of about 6 million Swedish kronor (SEK) and later claimed compensation from the National Labour Market Board (Arbetsmarknadsstyrelsen; hereinafter “the AMS”), relying on the Ordinance on Compensation from Public Funds for Damage Caused by Participants in Certain Vocational Training or Vocationally-Oriented Rehabilitation (Förordningen om ersättning av allmänna medel för skada orsakad av deltagare i viss arbetsmarknads-utbildning eller yrkesinriktad rehabilitering m.m., 1980:631; hereinafter “the 1980 Ordinance”).

By a decision of 7 April 1994 the AMS rejected the applicant’s claim. It found that no right of recourse for the indemnity paid could be derived from the provisions of the 1980 Ordinance.

The applicant company appealed to the Government, maintaining that section 25 of the Insurance Contracts Act (Lagen om försäkringsavtal; 1927:77) and the terms of the insurance policy in question entitled it to succeed to any right of compensation of the policy-holder in relation to the perpetrator or anyone else liable to damages.

In an opinion to the Government, the Chancellor of Justice (Justitie-kanslern) stated that predominant reasons spoke in favour of there not being any right of the applicant to compensation from the State under section 25 of the Insurance Contract Act or the 1980 Ordinance.

On 9 October 1995 the Government upheld the decision of the AMS. It stated that the 1980 Ordinance regulated the State’s undertaking to assume responsibility, under certain conditions, for damage caused to the provider of vocational training by participants in such training. The Ordinance did not, however, regulate the general legal liability to pay compensation for damage that occurred. Section 25 of the Insurance Contracts Act was not therefore applicable in relation to the State’s undertaking under the Ordinance. Moreover, there was no other basis for granting the applicant company’s compensation claim.

The applicant company then instituted proceedings for damages against the State before the District Court (tingsrätten) of Stockholm. It claimed that the State was liable for any damage caused by a participant in vocational training, either 1) pursuant to the provisions on compensation of the 1980 Ordinance, 2) according to a contractual responsibility deriving from the Ordinance and the placement of participants in vocational training, or 3) on the basis of a responsibility as employer (principalansvar) allegedly assumed by the State. The congregation had transferred its right to compensation to the applicant, according to the terms of the insurance policy.

The State maintained, inter alia, that the 1980 Ordinance was of a public-law character and that, in the absence of express rules on the transfer of claims, a right of compensation could thus not be transferred until the compensation was available for disbursement. Further, the applicant company could not, on the basis of the insurance policy, claim any right of recourse from the State for the indemnity paid but only from the perpetrator of the act causing the damage. Moreover, a participant in vocational training not being comparable to an employee, there was no employer’s responsibility.

By a judgment of 10 April 1997 the District Court rejected the applicant company’s claims. The court considered that the right of compensation under the 1980 Ordinance rested with the injured party – in this case the congregation – and that it could not be transferred until the compensation amount had been fixed and was available for disbursement. In so finding, the court had regard to the procedure for claiming compensation under the Ordinance, which prescribed that a public authority, upon application by the employer, determined in an administrative decision whether the conditions laid down in the Ordinance were fulfilled.

The applicant appealed to the Svea Court of Appeal (Svea hovrätt). On 24 November 1998 the appellate court quashed the District Court’s judgment in so far as it had determined the applicant company’s first two grounds and rejected the applicant’s claim based on the third ground.

The appellate court considered that the State, under the 1980 Ordinance, had assumed a certain economic responsibility for damage caused by participants in vocational training for which they would normally be liable themselves under general tort liability principles. This responsibility was, however, normally limited to SEK 100,000 for damage to property under section 4 of the Ordinance. Noting further that the Ordinance prescribed that compensation claims were to be examined by the AMS and, upon appeal, by the Government, the court concluded that that examination involved a comprehensive and final determination of the claims. Consequently, the District Court had had no jurisdiction to examine the applicant company’s claims in so far as they were based on the Ordinance. It made no difference that the applicant had added a contractual element to its second ground. The first two grounds for the applicant’s claim were therefore dismissed without an examination on the merits.

As regards the applicant company’s third alternative ground, the Court of Appeal found that there was no basis for finding that the State had assumed an employer’s responsibility under chapter 3 of the Tort Liability Act (Skadeståndslagen, 1972:207) or any other similar responsibility. In so far as the claim was based on this ground, it was accordingly rejected.

On 6 July 2000 the Supreme Court (Högsta domstolen) refused the applicant company leave to appeal.

B.  Relevant domestic law and practice

The 1980 Ordinance sets out the State’s liability for damages caused by persons in vocational training who receive benefits whilst undergoing training with a private employer. The relevant provisions, as they stood at the material time, read as follows:

Section 1:

“Compensation is given out of public funds in accordance with the provisions of this Ordinance to employers and other providers of rehabilitation or vocational training outside the regular school system for damage caused by a person who

1.  participates in vocational training and receives an education allowance,

...”

Section 2:

“Compensation is awarded for personal injury or damage to property inflicted on the employer, whether or not the person causing the damage is liable for it. The same rule applies in relation to pure economic loss inflicted on the employer by way of a criminal offence. ...”

Section 4:

“Unless otherwise prescribed in subsection 2, compensation of no more than SEK 2,000,000 for personal injury, no more than SEK 100,000 for damage to property and no more than SEK 100,000 for pure economic loss caused by crime is awarded for one and the same incident to every injured party.

Upon the Government’s approval, an agreement allowing for the award of compensation for personal injury, damage to property and pure economic loss with higher amounts than those laid down in subsection 1 may be concluded.”

Section 5:

“If the compensation does not exceed SEK 100,000

1.  the National Labour Market Board decides on compensation for damage caused by a person referred to in section 1, subsection 1 (1) ...

...

If the authority finds that compensation should be awarded in a higher amount than that mentioned in subsection 1 or if the matter involves questions of principle, it shall refer the matter, together with its opinion and the necessary investigation, to the Government for decision.”

According to section 13 of the later repealed Ordinance on Work Development (Förordningen om arbetslivsutveckling, 1992:1333), section 1, subsection 1 (1) of the 1980 Ordinance was applicable to a person undergoing work development training.

Section 25 of the Insurance Contracts Act regulates an insurer’s right of recourse. Subsection 1 provides:

“If an insurer, as compensation for damage pursuant to a liability insurance policy, has paid an amount of money which the policy-holder had the right to claim as damages from another person, the insurer succeeds to the right against that other person, if the latter has caused the damage with intent or gross negligence or is under a statutory obligation to pay damages whether or not he has caused the damage. However, such a right of recourse does not apply against someone who, under chapter 3, sections 1 or 2 of the Tort Liability Act, is responsible for the damage solely on account of another person’s actions.

Chapter 3, sections 1 and 2 of the Tort Liability Act provide that private employers as well as State and local authorities are liable for personal injuries, damage to property and pure economic loss caused in the course of their activities.

According to the preparatory works of the Insurance Contracts Act (Government Bill 1972:5, pp. 491 and 634), the right of recourse in section 25 of the Act should be restricted and only apply in relation to someone who is liable to pay damages on account of culpable fault or strict liability. Any extension of the right of recourse should be prevented.

The Government have decided on a few applications from insurance companies which have claimed compensation under the 1980 Ordinance on the plea of the right of recourse. In decisions of 14 March 1996 and 27 August 1998, the Government rejected two such applications where the companies had paid indemnities due to damage to property, the first one on the ground that the insurance company had no right to compensation under the Ordinance and the second one on the ground that the application was unfounded. However, by a decision of 28 May 2003, the Government granted compensation of 257,889 Swedish kronor to an insurance company which had paid an indemnity of that amount for personal injury sustained by a person in vocational rehabilitation.

COMPLAINT

The applicant company complained under Article 6 of the Convention that it did not have access to court for the determination of the dispute in the case.

THE LAW

The applicant company complained that it did not have access to court. It relied on Article 6 of the Convention which provides the following:

“1.  In the determination of his civil rights and obligations ..., everyone is entitled to a ... hearing ... by [a] ... tribunal...”

The respondent Government submitted that Article 6 § 1 was not applicable and that the application accordingly should be declared inadmissible ratione materiae. They claimed, firstly, that the applicant company could not be considered to have had an arguable right under Swedish law to compensation from the State and, secondly, should the Court find that such a right existed, the public-law features of the 1980 Ordinance entailed that the entitlement to compensation was not a “civil right”. In regard to the Government’s decision of 28 May 2003 to grant compensation to another insurance company, the Government asserted that it must be considered as an ex gratia payment, since there were no legal grounds for this decision. However, should the Court find that Article 6 § 1 was applicable, the Government admitted that there had been a breach of that provision, as the applicant company had not had access to a court for the determination of its claims under the 1980 Ordinance.

The applicant company maintained that Article 6 § 1 was applicable. It stated that the domestic case had concerned its right to succeed to the congregation’s entitlement to compensation from the State. This right, based on a transfer of a claim, was undoubtedly “civil” in nature. As the case had not been determined by a tribunal, Article 6 § 1 had been breached.

The Court reiterates that for Article 6 § 1, in its “civil” limb, to be applicable there must be a dispute over a “right” that can be said, at least on arguable grounds, to be recognised under domestic law. The dispute must be genuine and serious. It may relate not only to the actual existence of a right but also to its scope and the manner of its exercise. Moreover, the outcome of the proceedings must be directly decisive for the civil right in question (see, among other authorities, Frydlender v. France [GC], judgment of 27 June 2000, Reports of Judgments and Decisions 2000-VII, p. 186, § 27).

The Court notes that, in the domestic proceedings the applicant company relied on three alternative grounds for its compensation claim against the State. The third ground, relating to the State’s alleged responsibility as employer, was rejected on the merits by the Court of Appeal. In that respect, the applicant accordingly had access to court. The other two grounds, both based on the 1980 Ordinance, were, however, dismissed by the appellate court without an examination on the merits as it found that claims under the Ordinance were comprehensively and finally determined by the AMS and the Government and that the courts consequently had no jurisdiction in the matter. It must therefore be ascertained whether that lack of court determination breached the applicant company’s rights under Article 6 § 1.

The first question is whether the applicant company could claim, at least on arguable grounds, that it had a right to the compensation requested. In view of the status of the Convention within the legal order of Sweden, the Court observes firstly that a right to compensation cannot be derived from Article 6 § 1 or from any other provision of the Convention or its Protocols. It follows that the question whether such a right can be said to exist must be answered solely with reference to domestic law.

In deciding whether a right could arguably be said to be recognised by Swedish law, the Court must have regard to the wording of the relevant legal provisions and the way in which these provisions are interpreted by the domestic authorities.

The Court first notes that the 1980 Ordinance designates only employers and other providers of rehabilitation or vocational training as eligible for compensation for damage under the Ordinance. Moreover, section 25 of the Insurance Contracts Act excludes a right of recourse for an insurer against someone who is responsible for damage solely on account of another person’s actions. Thus, even if the State could be considered responsible for the actions of H.J. in the present case, there would not be a right of recourse for the applicant company under the terms of section 25. The wording of the relevant legal provisions therefore excludes a right of the applicant company to the compensation requested. It is true that compensation was in fact paid to another insurance company in a similar situation by a Government decision of 28 May 2003. However, in the light of the clear wording of the relevant provisions and having regard to the other Government decisions mentioned above, this decision, which postdates the proceedings in the present case, must be seen as an ex gratia grant of compensation not based on a right recognised under domestic law.

In view of the above considerations, the Court concludes that the claims asserted by the applicant company did not concern a “right” which could arguably be said to be recognised under Swedish law. This being so, Article 6 § 1 of the Convention was not applicable to the impugned proceedings.

It follows that the application is incompatible ratione materiae with the provisions of the Convention and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

For these reasons, the Court unanimously

Declares the application inadmissible.

S. Dollé J.-P. Costa 
 Registrar President

LÄNSFÖRSÄKRINGAR SKARABORG v. SWEDEN DECISION


LÄNSFÖRSÄKRINGAR SKARABORG v. SWEDEN DECISION